Communism by stealth, or ‘Corporate-Capitalist Welfare by design’?

“Infamously, Key then entrenched Working for Families as Prime Minister, and Ardern and Robertson have further locked in middle-class dependency with their December 2017 Families Package.

In fact in 2004, the left-wing critique of Working for Families was stronger than Key’s, that it would operate as a subsidy of low-paying employers.

That is, using Key’s original numbers, if there was a job to do worth $60,000 a year, an employer could hire someone with two kids, pay them just $38,000 a year, and they’d end up with almost the same pay in the hand.”

It’s an interesting and convoluted argument, demonstrating, IMHO, that we are no longer involved in a Left-vs-Right contest but merely exist on a neoliberalism continuum where the challenge is how to make the failed economic paradigm ‘appear’ to be working …

It’s not really about an actual economic paradigm. It’s about the ‘semblance’ of an economic paradigm. About trying to prove the mirage is the reality. I believe we need to find a coherent, comprehensible name for this phenomenon because it affects us all, whether we want a UBI or vehemently oppose it.

‘Simuliberalism’* perhaps? The similitude or simulation of neoliberalism?

“And don’t expect National to be able to do anything about it. With the financial status of so many working families now as locked in to welfare as any other beneficiary, abolishing Working for Families is becoming ever-more politically impossible.

It has transferred the primary economic relationship that determines family income from being that with the employer to that with the state. It is indeed communism by stealth. Clark and Cullen knew exactly what they doing when they set it up.”

Whatever it is, it certainly IS NOT communism … since the means of production aren’t owned by the State on behalf of its citizens … they remain largely in private hands pushing wealth upwards towards the very few … and this means it CANNOT BE communism by stealth.

Gezza

PDB

Working for Families was simply a massive Labour election bribe with negative long term effects & John Key (or anyone for that matter) was/is unable to remove it as turkeys don’t vote for an early xmas. In some ways it was no different to Helen’s ‘pledge card’ rort – a large advertisement for Labour paid for by the taxpayer.

Hooton is correct – the welfare state is a large part of the socialist component of our mixed economy and this current govt has shown it still has capacity to be grown into a much bigger, hungrier monster.

Gezza

Working for Families was simply a massive Labour election bribe with negative long term effects & John Key (or anyone for that matter) was/is unable to remove it as turkeys don’t vote for an early xmas. In some ways it was no different to Helen’s ‘pledge card’ rort – a large advertisement for Labour paid for by the taxpayer.

I think that’s too simplistically negative an interpretation, PDB. I can see the sense in the original idea as a way of responding to the economic & social disruption & dislocations caused the neoliberal ‘suck it and see’ revolution (or coups) of the Douglas & Richardson administrations.

Trickle-down didn’t happen to anything like the degree touted, & the population, business, government departments, homeowners, employers, & employees weren’t remotely prepared for it, or for the ill effects such a massive restructuring of the economy would have – many of which we are still experiencing.

This was an acceptable way of trying to level out the economic disparities & distotions it created. It was a pragmatic solution to the downside of the deregulation of labour & business that caused job losses & relative income / purchasing power loss to big chunks of society to the enormous benefit of a select few. The fact it worked to minimise these ill-effects is why Key continued it, in my view.

Hooton quite adroitly analyses its shortcomings, though without it, I think we’d have had worse problems.

Gezza

That’s not actually a sensationalist headline. It summarises what the author says in his piece, which itself reminds us what a silly claim it was when Key made it. But how it probably resonated with the dumbasses. It’s just an eye-catching headline. And it caught your eye, so it did its job.

Blazer

Alan Wilkinson

Are you serious? The Govt churns out 2600 pages of laws and regulations every year. Answering that question fully would take thousands of pages. As a simple example, income and company tax are a direct constraint on capital investment.

Alan Wilkinson

High Flying Duck

There are vast swathes of regulation to deal with, and the ones around employing staff are the most onerous and costly.
Many are necessary, but state intervention in how a business is run adds cost and reduces productivity.
The cost of WFF has to be borne somewhere and that place is taxation, which reduces the funds available to invest in productive enterprise.

High Flying Duck

If you can find a way to invest and grow without profits, all power to you.
I didn’t say all regulation was bad – but it has consequences and there should be as little as possible to ensure safe workplaces and contractual enforcement.

High Flying Duck

“In addition to the strong, positive relationship between regulatory freedom (ease of doing business score) and prosperity (GDP per capita), deregulation yields increasing returns. That is, each incremental increase in the DB score yields larger and larger gains in GDP per capita. In short, with each improvement in the DB score, there is a more-than-proportionate improvement in prosperity. This explains why post-communist countries that embraced Big Bang economic liberalizations, like Poland, have done so much better than the gradualists. The Big Bangers literally got more for their buck.”

Alan Wilkinson

I thought it was an excellent column by Hooton. I also initially thought the reference to communism inaccurate but have reconsidered that. The essential notion of communism is to pay everyone according to their needs rather than their contributions and this is exactly what WFF does and it has the exact destructive consequences of doing so.

Gezza

Flawed though it has proven to be long term, I don’t think communism ever envisaged paying people for doing nothing. It envisaged a functioning society everybody who worked in whatever job in it was contributing labour of equal utility & value to the well-being of an entire society. I dunno what a linesman’s job pays, or anyone working in the power supply & distribution system is – but when the power goes out the real value of whoever gets it bsck up again is pretty quickly obvious. It’s sad in some ways that it can never work because the same greed & hunger for power that make capitalism work so well for those at the top ends up perverting it.

Alan Wilkinson

Gezza

It’s not fantasy. And your objection to the idea is ideological.
I don’t care two hoots for your contention there’s no support for a moral distinction between those who work & those who don’t. It’s a simple human fact that people who work for a living resent keeping those who voluntarily don’t for no other reason than they can’t be arsed. Even in the most simple caring sharing village or family based societies, if you’re able to but not contributing your labour or skills toward keeping yourself and family or or your community, you’ll starve.

Gezza

High Flying Duck

Everyone who works has equal value, but there is no question that what they do does not have the same value.
Doing a job that millions of other could step into is simply not comparable to a job that takes special skills and ability and years of training.
A job that requires 24/7 thought is not equivalent to a punch the clock and forget about it until morning endeavour.
A brain surgeon is not equal to a receptionist.
Capitalism is far from perfect in determining these values – for example entertainers get disproportionate value (based on the correct principle of rarity, but not in terms of value to society). Also some essential jobs priced by the state are not in keeping with true worth.
But to suggest all are equal no matter what leads to a race to doing the least possible work to get your dues.

Gezza

I’m not talking about their *economic* value in terms of how little you personally want to pay to get someone to work for you. Your brain sugeon’s stuffed if his hospital ward & operating theatre’s dirty. If he didn’t have a receptionist, or his receptionist was hopeless, his skills would be poorly employed.

High Flying Duck

I think I’m missing some nuance here Gezza. Everybody has the same intrinsic value in capitalist and in socialist societies (although some are more equal than others…)
In terms of what people contribute, yes everyone plays a part. But if the brain surgeon is incapacitated the patient dies. If the cleaner isn’t there, they get another cleaner. And if there is no incentive over and above any other calling to put in the huge amount of time and resource to become a surgeon, why would you bother?

Blazer, it is not a fatal flaw – just a flaw. There is constant movement and correction of these things to find equilibrium. And it remains the best system, imperfect though it is, to run a society. It is certainly less flawed than any other system.

The key is finding the right level of regulation and enforcement to ensure a level playing field. Bastards and charlatans exist, no matter the system, and they will always find a way to break rules or skew the playing field. You cannot judge the system on these people – except in the case of communism where there is no mechanism to rid them once they gain power..

Gezza

I think I’m missing some nuance here Gezza.
…
In terms of what people contribute, yes everyone plays a part. But if the brain surgeon is incapacitated the patient dies. If the cleaner isn’t there, they get another cleaner. And if there is no incentive over and above any other calling to put in the huge amount of time and resource to become a surgeon, why would you bother?

You are. I’m not mounting an argument, personally, that any surgeon can be a cleaner & vice versa. There is no question that everybody can & should be a surgeon or we’d all be surgeons. All I am pointing out is that NOT LOOKED AT FROM A STRICTLY CAPTALIST ECONOMIC PERSPECTIVE every job people do has some benefit, from the moral dimension that they are doing something good, something beneficial to themselves & their society.

Someone studying to be a surgeon who isn’t funded by mum & dad & has to take out a loan to cover the massive costs of their training obviously is going to want to charge an arm and a leg (excuse the pun) as soon as they can to repay it. And thereafter they are going to continue to richly rewaded because their highly specialised knowledge & skills are in short supply. A few have a mind to give some of their time & skills free but I imagine most of them just reap the rich rewards of the demand for their work, & the risks are incredibly high in the sense that mistakes can cost lives or cause harm, so I don’t mind.

But what I don’t like is a system which sees the earnings of people who work the same hours in whatever jobs competed down by price to the lowest income wage possible, to the point where their standard of living falls below a socially accepted minimum & they end up socially disadvantaged.

High Flying Duck

Aaah. I wasn’t missing anything – I just disagree.
People have a responsibility to better themselves and be the most they can be. Rewards come to those who apply themselves and gain skills that lift them above the baseline.
If they choose not to improve themselves, then they will absolutely struggle.
But people need to decide whether to make the big sacrifices and shoot for the stars, or mega wealth, or pick a spot between. Opportunities are there for those who choose to look and to take them.
Yes there is luck, and yes economic cycles will make this easier or harder at times. That is what welfare is for – a safety net.
We don’t have a system that “competes down”. We have a system that rewards up.
Providing equality of opportunity is a big aspect to this, and one Governments constantly struggle with. To my mind they put resources in the wrong places and treat symptoms rather then resourcing opportunity.
The communist ethos stifles this striving for improvement that improves society and kills the competitive spirit. All are equal, but the equality is constrained and stagnant.

Alan Wilkinson

Gezza

I didn’t shift any goal posts. I am illustrating a point that you can’t simply see because of your ideological economic paradigm. I’m not talking about that. So endeth my discussion with you because you’re on a completely different track to the one I’m on & you just can’t jump tracks.